If you own shares in a company, invariably it will be involved with a takeover or sales campaign to tackle the competition. Ideally they are friendly, but some will turn unfriendly or there will be a war. Thankfully with trading in company stocks, bullets do not fly just money and if you put enough money on the table many people will take the money. For the unfriendly takeovers, there will be many strategies offered, and some will look and sound like war strategies. The files will be coded, the meeting places will be in places where hopefully few if any will recognize your face and you will be subject to takeover laws. In terms of studying war – there are a great many books written about military strategy and why some people won and others lost with what lessons are to be learned. For an introduction to the topic The Art of War – War and Military Thought, by Martin Van Creveld, Cassell & Co, London, UK, 2000 is a good book.

One of the oldest civilizations is the Chinese and they have may texts about warfare and one of the most popular was written by Sun Tzu. The Chinese used war as a last resort and would try other ways first. The best way to solve is use diplomacy or talk it out and come to an agreement. The second best is use of dirty tricks – kill the enemy commander or bribe his officers. The Chinese believed force was to use in limited conditions, when you are strong, pretend to be weak so as to tempt the enemy; when are you are weak, pretend to be strong so as to deter him. Use speed and secrecy to make out that are concentrating at one place, then attack at another place. If weaker than the enemy, avoid him, harass him and draw him into terrain that is unfavourable for him; if equal to him, wait patiently until he commits an error, as in chess. Confuse him and keep him ignorant of your designs by offering bit, mounting feints and/or spreading disinformation as appropriate. Finally when you have the enemy where you want him – or just when the enemy feels secure – fall on him like a thunderbolt.

Thus the strongest, most successful action is at the same time the most economic one. To achieve this ideal, two things are needed. The first is flexibility to take advantage of fleeting opportunities: said Sun Tzu ‘an army is like water which adapts itself to the configuration of the ground’. The second element is intelligence Sun Tzu distinguished between 5 types of spies – local spies, internal spies, turned spies, dead spies and living spies. Local are people who know the terrain, resources of the enemy. Internal are people who hold position inside the enemy’s focus. Turned spies are double agents. Dead spies sent out disinformation. Living are ones who go to the enemies side and comes back and delivers a report. It requires the wisdom of a sage when it comes to perceiving the truth. All the spies are grouped under the heading know them and know yourself.

Linking to dividend paying stocks, if you go into battle it is foolish to pick up your arms and rush out of the door. It is better to know your enemy or do homework or research them. Gain intelligence before you begin your move. With investing it is the same, doing nothing or sitting on cash can be a good strategy, before you do something. One method to protect yourself is buy stocks which pay a dividend or with give you income  while waiting and because the company is making money with have upside growth.

There are more questions than answers, till the next time – to raising questions